Informal sector must not be left out of GH¢1.2bn support to businesses -Prof. Felix Asante
Prof Felix Ankomah Asante, immediate past Director of ISSER
The government’s GH¢1.2 billion stimulus package to support businesses in the country must be targeted at the informal sector, a former Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Felix Asante has advised.
While commending the government for its decision to support businesses in times like this, he cautioned that the support must not be given to large firms only to the detriment of informal sector.
Speaking in an interview with Vaultz news, he said “we have a lot of businesses who are not registered but pay taxes and contribute to the country’s GDP so we need to find a way of supporting them.
“Sharing the package to make sure that every sector of the economy gets a certain percentage for businesses to start will be a major problem. Who qualifies, who doesn’t qualify, the informal sector is not registered but forms a key component of the economy. How do we identify them, how do we get to know of their changing concerns to support them? These are areas that we have to be innovative and come up with ways of supporting them, if not the system will collapse,” he explained.
He said attention should therefore be given to smaller bossiness that help in the value chain for the bigger ones.
He expressed concerns that there is the probability that the stimulus package could just be taken up with only few larger firms to the detriment of the smaller ones if care is not taken.
GH¢1.2 billion support
President Nana Addo Danquah Akufo-Addo, President of Ghana
To help alleviate the impact of the COVID-19 pandemic on businesses, the government of Ghana set aside GH¢1.2 billion as part of the coronavirus alleviation program.
Micro, small and medium enterprises (MSMEs) are set to benefit from GH¢600 as part of this package. This concessionary loan will be granted at 3% but a key document that is necessary for any business to qualify for this loan is the Tax Identification Number (TIN).
The key sectors targeted are agriculture and agri-business, healthcare and pharmaceutical, manufacturing, food and beverages, water and sanitation, tourism and hospitality, commerce, trade, garment and textiles among other services.
Re opening of schools
Primary pupils in the classroom in Ghana
In the wake of the stimulus packages set aside to be distributed to businesses, there are several calls from some individuals and institutions requesting the ban on social gathering to be lifted where schools will be allowed to operate and people allowed to hold religious gatherings.
Education is key to the development of every economy but not only that, closure of schools also mean that private school teachers will no longer be paid. So, the temporary unemployment affecting private school workers is also a major concern to various stakeholders. Some parents are also calling for schools to reopen because their children are disturbing at home. This is a major problem to parents who will have to combine taking care of their children with working from home.
From the perspective of private schools, the schools are also businesses but they are not covered by the stimulus package. So, the call to reopen schools is justifiable but is it right at this time?
Professor Asante believes that moving the economy forward, schools have to re-open because there are also private schools who need to pay their teachers.
“For me, the stage that is right is where anybody who wants to work is able to test their status of COVID-19 and be confident to move out of their homes to the work place or the confidence to move up to the classroom,” he stated.
Impact on the economy
Also speaking in an interview with The Vaultz News, an Economist at the Department of Economics, University of Ghana, Professor Nketiah-Amponsah, said it would take time for the impact of this stimulus support to be realised.
“Fiscal stimulus given by various governments is in order but at the moment it might not do much because some of these enterprises are already dead so it will take some time for the multiplier effect to be realized”.
Professor Nketiah-Amponsah also believed that it’s a good call for school to reopen because we are also losing some elements of human capital and should schools remain close for long, students will become dull.
“But do we allow them [students] to go to school looking at the arrangements in our classrooms, where you find 40 to 45 pupils in one classroom and in our high schools, you will find so many people in one dormitory. Also, toilet and bathroom facilities are also overcrowded. So, one has to be very cautious, in as much as we wish we could go back to school to develop our human capital, we should balance the equation very well so that we don’t exacerbate the situation at hand. So, left to me alone, I think we should allow for some few weeks in other to ascertain the next line of action.”